With Hugo Boss eyewear coming on board and Marc Jacobs performing well, Safilo UK's sales director Marco Patalano believes the product offering is right. Rory Brogan catches up with him
Safilo has started 2006 with a flourish and an improved financial rating after a 'historic 2005' that saw it re-listed on the Milan Stock Exchange.
First-quarter results this year show a staggering 160 per cent increase in net profit over Safilo's 2005 figure, and the UK has played its part in the improved performance.
One of the main reasons, according to Safilo UK sales director Marco Patalano, is the positive reaction to the company's brands from the start of the year. 'In the past two years Safilo's design department has been reorganised, with different responsibilities among the chief designers for particular brands. We've seen a real improvement from January in terms of quality of models and differentiation in the ranges. The focus on the brands has made a big difference.'
One of the names that is performing particularly well in both ophthalmic and sunglasses is Marc Jacobs. 'The success of Marc Jacobs is because the brand and the product are seen as something different. The styles are trendy and the brand is very hot, with good PR coverage of the product.'
Another development highlighted by Patalano is that Giorgio and Emporio Armani are now meeting their potential. 'When we acquired the brands from Luxottica the ranges had become a bit stale and the customers had lost enthusiasm towards them. We have now been able to do a classic/fashion range with subtle details for Giorgio Armani that appeals to a mature consumer with disposable income who wants an elegant but understated product.'
Emporio Armani is also becoming a big-volume brand for Safilo UK, with 'units closer to the quantities we like to see in this country'.
'The reaction to the sunglass range has been good too.'
On the subject of designer brands 'ping pong-ing' between manufacturers, especially Safilo and Luxottica, which recently acquired Polo Ralph Lauren from Safilo, Patalano suggests that there should be stability now. 'There's not a lot available on the market for us or our competitors to acquire and we have renewed our licences with long contracts with all our major licensees.'
Reaction to boss
One major brand that Safilo has added to its portfolio is Hugo Boss and the first new collection will be shown in October. 'I've seen the prototypes and pictures and the initial reaction to the brand is very positive.
'Hugo Boss as a company is very successful overall and is having a strong push in the UK, with a massive new flagship store in Sloane Square. The UK is one of its key markets in terms of growth, so I am sure there will be good support when we launch our new range.'
Safilo's reinvigorated financial position is the result of a four-year organic growth project, which Patalano describes as a rebalancing of the finances, helping to look forward, for investment and growth.
It is no coincidence that individual brands are getting more focus and feedback. 'We are learning about caring for the product. We realise that the brand is important, but you can't just sell the brand. You need to be original in design and care for the brand.'
While designer brands are clearly important, one of Safilo's recent successes is the house brand Oxydo. 'The growth of Oxydo in the past two years has amazed me. It is selling 70 per cent more every year.'
This he puts down to the fact that the designers have done a good job.
Oxydo retails from £70-75, giving good opportunities to the retailer and looking smart at the same time, he says. 'I do believe that brands like this help opticians, giving their patients an offer that covers different segments of the market, for example a student who wants something trendy and nice but would not spend £125 to £250 for a top designer frame.'
The company has also worked on the design of the Safilo range and the more traditional Elasta line, aimed at the older market. 'It's not a matter of thinking about products for the old, but creating products that make older people feel younger, even if they do need to use progressive lenses.'
Patalano, a business graduate, has worked at Safilo for 10 years, and has spent six in the UK, the past five as sales director. In that time he admits that the market has changed, particularly the taste and style of consumers. 'Rimless is quietening down, and while supras are still strong, they are also slowing. People want designs with a bit more personality, solid frames that make a statement without being flash.'
While he thinks people could be persuaded to change their frames more often, he does not believe consumers will ever have a wardrobe of seven or eight frames, in spite of eyewear being an important accessory, worn 16 hours a day.
Practitioners are becoming more daring in their buying habits and this he says can be seen by the fact that there is always an acetate frame among the top three to four sellers in each collection, whereas three years ago there was little demand for acetate. 'A good choice of sharp plastic models is quite important for the optician to position themselves and add character to the display,' says Patalano.
Focus on the independent
Another change since taking over at Safilo UK is that the independent is now a much larger part of the business. 'Before that, most of Safilo UK's business was with the big multiples and at a certain point we found ourselves in a weak position because of this. We've chosen to focus on the independent and this has proved successful, but we still have a very healthy relationship with some of the major multiples, so we have a good balance between the two.'
On the subject of whether 'niche' collections are the way ahead for independents, he describes the definition as something of a paradox. 'Everything is niche until it becomes mass market. It is a natural pattern for a brand to grow. Brands with a very extensive distribution defy "niche", for example if in the past three years you have gone from two to 20 active customers in the West End, you have proved successful but you should probably drop the word "niche" when describing your brand.'
Optics remains a tough market, and practices need to move up a couple of gears, especially compared to other retailers but above all they need to position themselves clearly in the marketplace, says Patalano.
As with fashion, Safilo regularly refreshes the ranges, introducing new designs every 10 to 12 weeks (2,500 new models in total every year), with all European styles available in the UK. 'We offer the complete range to practices. Sometimes a sales person like me looks at the product and says "that will never sell". It's better to give the customer the choice as it may be difficult to predict the next big thing. And to get the consumer to change, you have to propose something new and different every time.
'People will often take a design for the window and in a lot of cases this is the first piece they sell. We, as suppliers, must propose these styles to the optician so that they can show them to their patients and give one further reason to change.'
Patalano is also adamant that there is a strong reason for minimum orders of branded eyewear.
'At the end of the day it is a problem of presenting the range. If you have a brand in the window, you really have to be able to present it properly and offer enough to the consumer.'
